HomeGoldGovernment to investigate allegations against Simmers

Government to investigate allegations against Simmers

Aerial view of the
Simmer & Jack
Buffelsfontein gold
mine Number 10 Shaft
Johannesburg, South Africa — MININGREVIEW.COM — 01 October 2009 – The South African Department of Mineral Resources has confirmed that it will investigate allegations that emerging South African resources company Simmer and Jack Mines (Simmers) used its black investor partner Vulisango as a front to obtain mining rights.

“The department will investigate some of the issues that have been made public between the company and its black economic empowerment partner, including the allegations around its empowerment credentials,” departmental spokesman Jeremy Michaels told Bloomberg News by telephone from here.

“Simmers welcomes any investigation that leads to a speedy resolution on this matter,” company spokeswoman Gail Strauss said in an e-mail. “The company has obtained legal opinion on its interpretation of South Africa’s black empowerment laws, and is comfortable that Simmers meets and exceeds the requirements of the Mining Charter,” she added.

Bloomberg News explains that South Africa has compelled retailers, banks and mining companies to sell stakes to black investors to help compensate for discrimination under apartheid, which ended in 1994.

Vulisango “’ which owns 22% of Simmers “’ is concerned it’s been used by Simmers to get mining rights, reports Business Day, citing Vulisango CEO Valence Watson. Five board members at Simmers resigned last week, three of them from Vulisango, the newspaper said.

“We are concerned about the situation, particularly the impact on empowerment broadly” the department’s Michaels said.

Black investors own 42% of Simmers, according to company investor relations executive Nick Goodwin.